Ocean Park Towers [2002] QBCCMCmr 325 (24 May 2002)

RA MeekREFERENCE: 0100-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13096
Name of Scheme:	Ocean Park Towers
Address of Scheme:	3494 Main Beach Parade MAIN BEACH Q 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Nicholas Malouf, the company nominee of Nicholas Malouf Investments Pty Ltd, the corporate owner of lot 34


RA MeekI hereby order that the application by Nicholas Malouf, the company nominee of Nicholas Malouf Investments Pty Ltd, the corporate owner of lot 34, for an order that the resolution number 7 from the AGM on 9^th February 2002 be ruled invalid, is dismissed. n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0100-2002

“Ocean Park Towers” CTS 13096

The applicant, Nicholas Malouf, the company nominee of Nicholas Malouf Investments Pty Ltd, the corporate owner of lot 34, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That the resolution number 7 from the AGM on 9^th February 2002 ... be ruled invalid.

The applicant also sought an interim order, and on 1 March 2002 the following interim order was made -

RA MeekI hereby order that the owner of lot 27, Emily Amelia Margin shall not proceed with the construction / installation of sliding glass doors on the balcony of her lot pursuant to motion 7 resolved at the AGM of the body corporate held on 9^th February 2001, until such time as a final order is made, this application is withdrawn, or is of no effect by operation of law. n

Section 223(1) provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

a) a claimed or anticipated contravention of the Act or the community management statement; or

b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

The resolution which the applicant seeks to invalidate is a motion numbered 7 carried at the AGM of the body corporate on 9 February 2002, proposed by the owner of lot 27, Emily Amelia Margin (Margin). The motion stated –

I wish to make application for permission to install sliding glass doors to the balcony of my unit on the 9^th Floor, to comply with Australian Standard AS.1288 and with the committees specifications. The doors would be on my property with the rails at the same height as the existing balcony rail and the uprights corresponding to the inner door uprights making the construction co-related to Ocean Park Towers present appearance.

I understand that this motion was carried by a vote of 18 yes, 10 no, and nil abstentions.

This office sought submissions from the body corporate committee, all owners (36 in total), and Margin. Submissions were received from 10 owners, not including a second from Michael McRae, made in his capacity as secretary. As is the right of an applicant, the applicant then replied to the submissions received.

The applicant’s reply is a substantial document. In contrast to the original grounds to the application, which are not lengthy, and do not attach any other material other than that relating to the meeting / motion in issue, the applicant’s reply alleges, for example, that –

• The committee is not meeting its requirement to control, manage and maintain the parcel for the benefit of all lot owners; ...

• There is no facility to clean the exterior of the doors ...;

• The owner of lot 27 is not going to help the Commissioner or the Committee by ascertaining the local authority requirements for the approval.

The applicant then individually responds to all submissions, after first summarising the content of the submission. The applicant then concludes his reply with 14 points listed under the heading “General Submissions from Mr N Malouf”. These points in themselves extend considerably in my view the grounds on which the applicant is relying. Moreover, some of the points are wide in their scope and contain statements which are simply that, for example The committee is trustee to preserve the rights of all owners and has an obligation to do things necessary to fulfil this obligation.

The applicant then attaches two reports which he commissioned specifically in respect of the dispute the subject of the application. The first from Burling Brown & Partners Pty Ltd, Architects, and the second from Napier & Blakeley Consulting, Building Consultants.

I have serious reservations concerning this reply. I consider that the applicant’s reply raises new allegations and canvasses new material. It is the policy of this office that a reply should be limited to material or issues canvassed in the submissions and should not introduce new allegations or new material. The basis of this policy is the requirement of an adjudicator to observe natural justice in investigation an application. This is required by section 220(3) of the Act. In the context of a reply, I consider that natural justice requires that I not give any, or any significant weight, to new allegations or new material.

I had the option of raising this issue with the parties and allowing all persons who made submissions, to make further submission. However I determined against this, for several reasons –

• The onus is upon an applicant to present all material on which he/she intends to rely, as part of the originating grounds;

• There are both time and cost implications of adopting this approach. This application has already been delayed due to the ground of extensions for both submissions and reply;

• I consider there would be additional cost implication for the several persons who made submissions in that in order to challenge or rebut “expert” evidence, it is usual to similarly obtain expert reports;

• I do not consider that the issue involved warrants the further delay, and consequent widening of the terms of this dispute.

In the circumstances, whilst I note the applicant’s reply, I intend to limit my consideration specifically to the applicant’s reply to the submission made, but not including allegations such as “The committee is not meeting its requirements to control, manage and maintain the parcel for the benefit of all lot owners” or other new aspects which have been raised eg. Cleaning of glass.

If the applicant disagrees with this approach, and considers that I have erred, then I refer the applicant to applicable appeal rights, in the event that he is aggrieved by the order made (see section 237 of the Act). I however consider that the obligation to observe natural justice dictates that I adopt this approach.

In the supporting grounds, the applicant states that –

Lot owners have no concept of what was or is proposed from the wording of motion number 7 or the attached note:-

•	There are already three different balcony enclosures at OPT...,
•	There is no attached drawings or specification;
•	There is no obligation to seek local government or other statutory approvals
•	...
•	proposed enclosure would probably interfere with fire ratings between levels. ... The resolution creates no obligation on the owner of lot 27 to ensure that any enclosure meet fire safety requirements.

As I noted earlier, this office sought submissions from the body corporate, all owners, and Margin in relation to the application and there were 10 submissions received, or 11 if you count as separate the submissions from Michael McRae, made in his dual capacities as an owner and as the secretary.
Of these 10 or so submissions, there is one supportive of the application. The remaining submissions oppose the application.

One observation that may be drawn from this is that of the 18 owners who voted in favour of the motion, more than half are sufficiently opposed to the application to make a submission opposing it. In contrast, of those owners who presumably voted against the motion, only 2 (including the applicant) considered that the issue was sufficient to warrant the making of an application / a submission.

It is a clear theme of most submissions supportive of the application that, in essence, the owners approved the motion on the basis that the balcony would be enclosed in the same material and manner as the enclosure for lot 29, and further, that the work was in fact to be undertaken by the same contractor who installed the balcony enclosure for lot 29. Further it was clearly contemplated by owners that Margin would be required by the committee to, and would comply with all necessary government and council approvals. It is clear from Margin’s submission that she accepts the jurisdiction of both the committee and the local authority to set conditions on the enclosure.

The applicant states the committee has effectively abdicated its jurisdiction on the issue in that as at “the AGM on the 9^th February 2002 ... no committee specifications existed. Future rules could not legally apply to this application and even if this was the intention then lot owners did not know the content and effect of any future committee rules ... Future committee specifications could have very significant detrimental effects on the appearance of any enclosure”.

The applicant is arguing two separate possibilities here. The first is that given that no specifications (allegedly) existed as at the date of the AGM, then the committee, could not subsequently impose any conditions or specifications. A number of owners, and the secretary, in submissions reject this argument. There is reference to the wording of the motion itself “comply ... with the committee specifications”. The secretary stated in one submission that –

The committee meeting held on 5/1/02 discussed the submission of specifications or regulations by the committee regarding this motion. Mr Malouf suggested that this be left to a subsequent committee meeting, if the motion was passed. The committee agree to this ...

In his reply to the submission by the secretary, the applicant does not deny the accuracy of the above statement. This statement suggests to me the possibility that the applicant might in fact have had an ulterior motive in suggesting to the committee that the matter of “specifications” be left until after the motion had been carried, if in fact it was.

In the alternative, the applicant is arguing that the committee could not make rules (or set specifications) after the event, and that if they did, “owners did not know the content and effect of any future committee rules” and might be detrimentally affected by such rules.

I consider that the wording of the motion is sufficiently wide to contemplate the committee establishing specifications after the event ie. if the motion was approved. Moreover, I consider that this is within the power of the committee so to do.

In a further submission by the secretary, he states that –

At a committee meeting held on 21/03/02 the committee resolved to accept (specified) specifications and subject to the commissioners ruling the motion, and subsequent approval by GCCC, which is to include appropriate authority with regarding to meeting fire safety requirements ... and the installation is to be in all ways the same as the installation on unit 29 on the same floor as lot 27, then the committee will give final approval to proceed.

From this, it seems to me that the committee has determined the conditions on which it will approve the enclosing of the balcony.

I further consider that the applicant’s concern that owners would not know of the committee’s “specifications” and that those specifications might have a detrimental effect on the building, is an unnecessarily pessimistic proposition. It seems to me that to accept the proposition might be to deny the committee any jurisdiction whatsoever. I consider the better view is that committees can be authorised to finalise a matter on behalf of owners.

In concluding his grounds, the applicant states –

The proposed structure must be fixed to floors, wall and ceilings. The structure must therefore be an improvement affixed to boundary structures that are common property. Improvements to common property require a special resolution for approval. This was not put as a special resolution and if put as such it would have failed.

The secretary has rejected this in his submission. He states –

The structure would be fixed inside the present balcony rail and as such this would be on the owner’s property and not on common property. ... “Boundary Structure” for a lot included in a CTS means a floor, wall or ceiling in which is located the boundary of a lot with another lot or common property. The attachment in this case would be the floor between lots 27 and 24, the ceiling betweens lots 27 and 30 and the wall between 27 and 28. Land Titles Act 1994 – Where a lot is separated from another lot or common property by a floor, wall or ceiling, the boundary of the lot is the centre of the floor, wall or ceiling. ... from advice sought from the information service ... in regards to the resolution required, the committee accepted that as the installation is to be contained within the boundaries of the owners lot and no resolution was stated in the by-law covering this application, then ordinary resolution applied.

The applicant is incorrect. The enclosure of the balcony is not affixed to boundary structures that are common property thus requiring a special resolution. I am satisfied that no part of the common property is involved. There is no specific provision in the legislation concerning improvements to an owner’s lot, and it is open for an owner to make an improvement subject to the terms of any applicable by-laws.

By-law 9 provides that –

The occupier of a lot must not, without written approval of the body corporate make a change to the external appearance of the lot.

Clearly, some form of body corporate approval is required. Section 92 of the Act provides that a decision of the committee is a decision of the body corporate, provided the decision is not one on a restricted issue for the committee. Restricted issues for the committee are set out in section 26 of the standard module. The applicant, in his reply, refers to this section, and states –

Motion 7 does not delegate the power to the committee to either set the specifications not to approve the application.

The applicant appears to be saying, though it is not clear, that the decision is a restricted issue for the committee as the decision is one affecting rights, privileges or obligations of the owners of lots in the scheme. The applicant does not elaborate on which or what particular right, privilege or obligation of lot owners is affected. I consider there is no financial obligation imposed on other owners by the installation. Further, I do not consider that an specific right or privilege is lost to owners by the installation. I conclude that the decision is not a restricted one within the terms of section 26, and that it would have been open for the committee to have authorised the installation. Alternatively, if the committee considered it prudent to do so, it might have referred the matter for approval by the body corporate in general meeting.

In any event, the decision was referred to the body corporate in general meeting for approval, and was in fact approved, subject to compliance with Australian Standards and “with the committees specifications”.

I conclude that the installation has been approved and that Margin is entitled to proceed with the installation subject to all necessary preconditions of the committee, and the local authority being met. I intend to dismiss the application on the basis that I do not consider the objections raised by the applicant to the motion being carried are either valid, or warrant the motion being invalidated. I have ordered accordingly.